But to say that online ad growth means good times ahead for YouTube, or that this is bad for TV ad sales is a mistake (CNet report here).
The fastest growing, most advertiser friendly videos on the net are studio produced, often made-for-tv content. Nevertheless, there are terabytes of UGC video waiting to be monetized. This suggests that there are four potential avenues of online video advertising growth.
1. Hulu and YouTube's studio content explodes, bringing along ad revenues.
Will it be in professional video monetization in digital channels (ala Hulu)? Will YouTube's efforts at professional studio-produced video pan out? What video formats will YouTube run against true professional content?
- My Thoughts - this will grow, but largely as a cross platform or cross property media buy. These won't be value adds, but these will become increasingly more bundled, consolidating and driving best value from budgets. This is also require that agencies break down walls and work together. This may present a real value to those digital shops with traditional agency counterparts (and vice versa).
2. We'll figure out how to advertise against UGC
Or could this growth be in UGC? Will YouTube crank out a new technology that allows safe brand advertising over their massive virtually untapped UGC library?
- My Thoughts - unlikely. There may small incremental growth, but UGC may well remain a loss-leader for monetizable content - unless image/audio recognition technologies vastly improve, allowing users to click on items, billboards, an audio icon etc for direct sales. This school of technology could present a sizeable lift in YouTube revenue, particularly given their search model.
3. Prosumer content explodes.
Complete with real, deep ad networks, unique integration opportunities and scalable relationhips with the long tail.
- My Thughts - This may very well happen as the economy forces resource consolidation. However, I don't see this presenting massive industry growth.
4. Pirates will drive revenues
Sounds crazy, right? If YouTube were to embrace piracy along the lines of MySpace, utilizing Auditude-type technologies to detect studio content and serve studio backed advertising against this content, YouTube would open up new worlds of revenue, introducing a viable channel for legal user uploads of copyrighted content. Industry changing, right?
- My Thoughts - This could present incredible opportunity for all parties involved, but I don't know that Warner Brothers (for example) is really ready to release a streaming copy of the latest Harry Potter movie (which is all over YouTube) for the minimal ad buys against it. Additionally, quality control will be near impossible. While the studios have little to lose by tapping into this channel, I don't know that they would be comfortable allowing their content to be consumed via what was originally a pirated source. Additionally, once studios are ready to open up complete libraries to online streaming, they may feel safer running the content in their own environment, on Hulu or on studio sites.